Bitcoin wave
China’s central bank said it is investigation market manipulation, money laundering and unauthorised financing. Chinese exchanges trading in currency have seen the price of Bitcoin fall more than 18%. Beijing is trying to crack down on money flowing out of the country illegally, as yuan’s weakening has prompted several people in China to try to buy foreign currencies and are using the crypto-currency to circumvent strict government rules aimed at preventing money from leaving the country.
As a result, the Bitcoin currency had soared to record highs in the earlier days of 2017, a rise attributed purely to strong demand from China. The Chinese central bank said the “spot checks were focused on how the exchanges implement policies including forex management and anti-money laundering.
The currency traded at £ 585 ($760) on Thursday morning, down from £605 ($915) the previous day.
On Sunday the value of one Bitcoin dropped £1,435 ($1863) before bouncing back to £1, 849.54 ($2402) on Wednesday. The Bitcoin relies on web-based transactions handled across thousands of computers across the world who uses in an anonymous way to move money daily globally.
Bitcoin’s value rose by 125% in 2016 making it the world’s fastest-performing currency.
Bitcoin like all currencies, its value is determined by how much people are willing to exchange it for. The Bitcoin transaction process is called “mining” which involves computer solving a difficult mathematical problem with a 64-digit solution and for each problem solved, one block of Bitcoins is processed and the miner is rewarded with new Bitcoins. There are about 15 million Bitcoins in existence. To receive Bitcoin, a user must have Bitcoin address – a string of 27-34 letters and numbers – which acts like remote postbox to and from which the Bitcoins are sent. As there is no central register of these addresses, people can use them anonymously when making a transaction and protect their identity. These addresses are stored in Bitcoin wallets which are used to manage savings.